Feb 6 (Reuters) - For more than three decades, John Malonehas been known as America's King of Cable. Now, he is gainingthat title in Europe as well.

Malone, through his Liberty Global Inc unit, hasmade his most audacious bet yet on the burgeoning European cablemarket, striking a deal for about $15.75 billion to acquireVirgin Media Inc, the cable group in which fellowbillionaire Sir Richard Branson holds a 3 percent stake. Thedeal is Malone's biggest ever in Europe and puts him in directcompetition with Rupert Murdoch, the News Corp chairmanwho controls Britain's BSkyB.

Liberty Global, which Malone controls with a roughly 40percent voting stake despite only owning 4 percent of itsequity, already ranks as the largest cable operator in Europewith 18.4 million subscribers. It also has 1.2 millionsubscribers in Chile and Puerto Rico for a total of 19.6million.

The company's position is the result of a decade-longacquisition spree spanning 11 countries from Germany and theNetherlands to Switzerland and Belgium that helped grow LibertyGlobal into a company with $7.6 billion in revenue and $3.6billion in operating cash flow from continuing operations in thenine months ended Sept. 30.

Virgin Media was created by the merger of cable operatorsNTL, Telewest and Virgin Mobile in 2006. It will be not onlyMalone's largest European acquisition to date, but also one hehas been trying to seal for more than a decade. Malone beganbuying up stock in Telewest and tried several times to acquireNTL at the turn of the century when they were still separatecompanies. His plan even back then was to merge them.

Virgin Media's 4.9 million subscribers significantly trailsBSkyB, the UK market leader, which has 10.7 million subscribers.Indeed, battles with BSkyB over access to channels and content,coupled with heavy losses from a network upgrade, forced VirginMedia into a precarious financial situation that prompted a debtrestructuring to help it stabilize. The company posted its firstannual profit in 2011.

DEALS AND MORE DEALS

Malone timed his European buying spree to the exit plans ofprivate equity firms that have rolled up smaller regional cableoperators in Britain and Germany in recent years.

In Belgium, Liberty in September made a tender offer for the49.6 percent of Telenet Group Holding NV it didn'talready own. The bid failed after the group's management deemedit too low. Liberty currently owns 58.3 percent of Telenet.

Liberty Global CEO Michael Fries recently told a CitigroupInc investment conference that the group would be lookingfor acquisitions in Europe to both bolster existing markets andenter new ones.

"He sees the importance of scale in the business," saidEvercore Partners analyst Bryan Kraft of the rationale behindMalone's European acquisitions. "He's been trying to build scalewithin these markets and also leverage the scale that they bringas a company across all these markets."

The Kabel BW and Unitymedia deals marked Malone's return tothe German market, which ranks as the second-largest cablemarket in the world behind the United States. In 2001, he triedto acquire cable assets from Deutsche Telekom and Deutsche Bank,but the deals were eventually blocked by German regulators,forcing Malone into a temporary retreat.

Malone's M&A activity suggests that he is trying to makeLiberty Global a Western European cable play. Prior to hisbuying in Germany and the UK, he sold out of Scandinavia,France, Japan and Australia.

ISI analyst Vijay Jayant said expanding in Western Europegives Malone a more focused strategy in a market with highdisposable income.

A EUROPEAN TCI

The strategy Malone is pursuing in Europe is essentially thesame strategy he used in the United States; take a patchwork ofdisparate and technologically outdated cable systems, stitchthem together and upgrade their networks to leverage theircombined power to reduce internal costs and reduced externalcosts such as programming. That is the model he used to foundTele-Communications Inc, or TCI, which Malone grew into thelargest cable operator in the United States before selling it toAT&T Inc.